Commerzbank’s Charlie Lay reports that the Reserve Bank of India kept the repo rate at 5.25% with a neutral stance, describing India’s growth and inflation outlook as positive and balanced. RBI slightly upgraded its growth forecast, expects inflation to stay within target, and sees USD/INR trading sideways near 90–91 after support from the US-India trade deal.

Policy on hold with steady USD/INR view

"The Reserve Bank of India (RBI) voted unanimously to leave the policy repo rate unchanged at 5.25% last Friday, matching market expectations."

"RBI is in a good place and they don't see any need to alter policy either way anytime soon."

"RBI Governor Sanjay Malhotra even highlighted that he “expect rates to remain at these levels for some time”."

"RBI slightly raised the fiscal year 2025-2026 (FY2025-2026) growth forecast to 7.4% from 7.3% initially and maintained that growth risks are “evenly balanced”."

"We could see USD-INR trade sideways near term between the 90-91 range."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)